- Total Revenue: $161 million, up 11% year-over-year.
- Subscription Revenue Growth: 12% year-over-year.
- Non-GAAP Operating Margin: 20%.
- Non-GAAP Net Income: $43 million, up 40% year-over-year.
- Operating Cash Flow: $41 million.
- Free Cash Flow: $34 million, with a free cash flow margin of 21%.
- Annual Recurring Revenue (ARR): $620 million, up 10% year-over-year.
- Net New Customers: Increased by 24, bringing total customer count to 4,435.
- Revenue Renewal Rate: 93%.
- Net Retention Rate (NRR): 104%.
- Non-GAAP Gross Margin: 79%.
- Non-GAAP Subscription Gross Margin: 82%.
- Calculated Billings Growth: 12% year-over-year.
- Remaining Performance Obligations (RPO): Up 9% year-over-year.
- Current RPO Growth: 10% year-over-year.
- Strategic Product Sales: Represented 28% of total sales.
- SAP Partnership Revenue: 25% of total revenue.
- Cash Equivalents and Marketable Securities: Approximately $800 million post-recent transactions.
- Q3 2024 Revenue Guidance: $162 million to $164 million, representing 8% to 9% growth.
- Q3 2024 Non-GAAP Operating Margin Guidance: 19% to 20%.
- Q3 2024 Non-GAAP Net Income Guidance: $38 million to $40 million, or $0.49 to $0.52 per share.
- Full Year 2024 Revenue Guidance: $647 million to $651 million, representing 10% growth.
- Full Year 2024 Non-GAAP Operating Margin Guidance: 18% to 19%.
- Full Year 2024 Non-GAAP Net Income Guidance: $158 million to $168 million, or $2.08 to $2.21 per share.
Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BlackLine Inc (BL, Financial) delivered $161 million in total revenue, a non-GAAP operating margin of 20%, and $43 million in non-GAAP net income.
- The company saw an increase in the number of customers with $1 million or more in annual recurring revenue, reaching 68.
- Strong performance in Europe and APAC, with notable new customer wins and expansions.
- Successful integration of the invoice-to-cash solution, leading to inclusion in the Gartner Magic Quadrant.
- Improved execution and focus on value-centric approaches have led to better competitive win rates and customer satisfaction.
Negative Points
- Total deal volume remains subdued, and new business sales cycles are extended.
- Services revenue growth was flat, continuing to weigh on overall top-line performance.
- Renewal rate was in line with expectations but below long-term targets, indicating room for improvement.
- Mid-market customer churn increased, impacting overall customer retention rates.
- Demand environment remains muted, with no significant tailwinds observed.
Q & A Highlights
Q: What are you seeing in the dealer environment, and how much of the improvement is due to market changes versus your investments?
A: Our deliberate focus on execution and spending more time with customers is having a positive impact. It feels like we're driving demand through our performance and real conversations with customers, showing the value we can bring.
Q: Can you talk about the potential pipeline for the FRA product included with SolEx and the 25% contribution from SAP?
A: We are pleased SAP recognizes the value of FRA. While we didn't have deals this quarter under that partnership, we are building a promising pipeline. The 25% contribution from SAP could grow as their initiatives pick up.
Q: What is driving the strong momentum in Europe and APAC compared to the US?
A: We are smaller in Europe and APAC, but our teams have executed well since the beginning of the year. Their understanding and execution of our strategy have been terrific, and we expect this to continue globally.
Q: How are you thinking about the growth versus margin equation, especially given your high free cash flow margin?
A: We are pleased with our business model's performance, which generates free cash flow. We will continue to drive free cash flow while also investing strategically to support growth.
Q: How are you collaborating with partners to develop and enhance the accounting studio?
A: Partners provide expertise in process re-engineering, which we visually represent in the studio. This collaboration helps us develop capabilities that showcase partners' expertise and enhance our solutions.
Q: What are the most natural platform adjacencies you could explore from an M&A perspective?
A: We are looking to deepen and broaden our platform with natural extensions for the office of the CFO. We are diligent in our capital allocation and will pursue opportunities that make economic sense for our shareholders.
Q: How are you addressing the renewal rate and net retention rate challenges?
A: We are focusing on enhanced customer onboarding, digital self-service options, and building customer groups within key industries. These efforts aim to improve customer satisfaction, engagement, and usage, which should drive higher renewal rates and retention over time.
Q: What is driving the improved close rates and pipeline creation?
A: The combination of new leadership, better collaboration across teams, and a focus on articulating our platform's value is driving improved execution. We are still early in this process but are proud of the progress made.
Q: How are you thinking about the demand environment within the office of the CFO?
A: While additional sign-offs are still required, there is more willingness to invest if we can demonstrate clear value and ROI. Our improved ability to show the value of our solutions is helping us win more opportunities.
Q: Can you expand on the digital self-service initiatives and their impact on go-to-market strategy?
A: We are creating a repository for common customer questions to provide easier access to information. This initiative is in response to customer requests and aims to improve customer and partner experience.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
